Who is Depository Participant?
A Depository Participant (DP) is an agent of the depository through which it interfaces with the investor. A DP can offer depository services only after it gets proper registration from SEBI. A Depository can be compared with a bank, likewise a DP may be compared with a branch of a bank.
What is the minimum net worth required for depository?
The minimum net worth stipulated by SEBI for a depository is Rs.100 crore.
How many Depository Participants are registered with SEBI?
At present approximately 390 DPs are registered with SEBI. A list on DP’s and their addresses can be downloaded from SEBI website.
What are the benefits of availing depository services?
Benefits are enumerated below:
⇒ A safe, convenient way to hold securities;
⇒ Immediate transfer of securities;
⇒ No stamp duty on transfer of securities;
⇒ Elimination of risks associated with physical certificates such as bad delivery, fake securities, delays, thefts etc;
⇒ Reduction in paperwork involved in transfer of securities;
⇒ Reduction in transaction cost;
⇒ No odd lot problem, even one share can be sold;
⇒ Nomination facility;
⇒ Change in address recorded with DP gets registered with all companies in which investor hold securities electronically eliminating the need to correspond with each of them separately.
⇒ Transmission of securities is done by DP eliminating correspondence with companies;
⇒ Automatic credit into demat account of shares, arising out-of bonus/split/consolidation/mergers etc.
